Empty Bedroom, Empty Council Hardship Budget, Empty Saving?

It has been reported in the press over the last few days that many councils have run out of the emergency cash fund supplied by Central Government in order to alleviate the impact on tenants worst affected by the introduction of the spare bedroom benefit reduction, the ‘Bedroom Tax’. Questions have been raised via Freedom of Information requests by the ‘False Economy Campaign Group’ to 311 Councils in England Wales and Scotland, to find out the true extent of the shortage.

The difficulties occurring in some areas are so great that the cash has run out for some Local Councils in February, with the Financial year ending at the start of April, even though one in five councils rejected over 40% of applicants.

Of particular note is Leeds City Council who has turned down 40% of its applicants, but had spent 105% of its budget by the 12th February. All the while, constricted supply is preventing tenants that could move from moving (see other article here).

Whilst the benefits system has often been wasteful and abused by those of a deceitful nature, reducing the benefits of some who have a spare bedroom in order to better distribute the available accommodation to families without a sufficient home, whilst reducing the overall size of the massive welfare budget, is a commendable aim.

A DWP (Discretionary Housing Payments) spokesman has reportedly advised that the Government saving has equated to £1 million pounds a day – an excellent return – but DWP went on to report that, in order to assist those on a low-income or in debt, they have made grants to the Councils of £345 million pounds throughout the last financial year, seemingly negating the positive impact on the welfare budget.

Although this saving will increase as the benefits of the policy will save year on year and help to alleviate discrepancies in the housing stock this demonstrates that there is, at present, only a limited saving to be had for the Country as a whole. Politically then, the scheme itself, introduced a year ago by Iain Duncan Smith, arguably may not be justified. Indeed it is not clear if these figures include the full operating and assessment costs of running the scheme – if they don’t, there may have been no saving at all.

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Meanwhile, the charity ‘Christians Against Poverty’ warned that 1 in 10 of the new people it helps have been struggling to pay off the overpayment of housing benefit. They report that out of the new families who have approached the charity in the last year, 40% had Council tax arrears and that the average debt of the families through housing benefit overpayment was £1,613.